Small business owners have a lot on their plate. Not only do they need to worry about making money and keeping their businesses afloat, but they also have to keep track of their accounting and bookkeeping. This can be daunting, but it doesn’t have to be. This blog post will discuss the top accounting and bookkeeping tips for small business owners and how our Quantum Accounting team can help!
Our Accounting and Bookkeeping Tips for Small Businesses
As a small business owner, you need to make sure that you are keeping track of your accounting and bookkeeping. This can seem daunting, but it is important to stay on top of your finances. Luckily, we are here to help! Here are our top accounting and bookkeeping tips for small business owners:
Keep Your Business and Personal Finances Separate
One of the most important accounting and bookkeeping tips for small business owners is to keep their business and personal finances separate. This may seem like a no-brainer, but you would be surprised how many people mix up their personal and business finances. By keeping your finances separate, you will make it easier for yourself come tax season, and you will better understand where your money is going.
Pay Yourself a Salary
Another important one of our accounting and bookkeeping tips for small business owners is to pay themselves a salary. This may seem like a counterintuitive tip, but it is actually very important. By paying yourself a salary, you will be able to track your expenses better and see where your money is going. Additionally, paying yourself a salary will make you less likely to dip into your business funds for personal expenses.
Reimburse Yourself For Business Expenses
It is also important for small business owners to reimburse themselves for business expenses. This means that if you spend money on something for your business using a personal account, you should reimburse yourself from your business account. This will help you keep track of your business expenses.
Keep Your Receipts
Another one of our accounting and bookkeeping tips for small business owners is to keep their receipts. This may seem like a no-brainer, but you would be surprised how many people do not keep their receipts. By keeping your receipts, you will have a record of your expenses, and you will be able to deduct them come tax season.
Track and Reimburse Your Business Mileage
If you use your personal vehicle for business purposes, tracking and reimbursing your business mileage is important. This is considered a business expense and it can be deducted come tax season.
Invoice Within 48 Hours
If you provide products or services to your clients, it is important to invoice them within 48 hours. This will help you stay on top of your accounting and ensure you are getting paid promptly.
Send Payment Reminders
If a customer misses a deadline, you should act quickly and send them payment reminders. These reminders can be sent via email a few days before the due date and then one day after the due date.
Outsource Your Payroll
Payroll management is a burden for most small businesses, which is why 45% of small businesses outsource their payroll accounting. And our team at Quantum highly recommends you do the same. Issuing paychecks, withholding employee taxes, and filing payroll tax returns are time-consuming and require accounting expertise.
Analyze Your Accounting Reports
At the end of each month, you should analyze your accounting reports. This will help you understand where your money is going and where you can cut costs. Small businesses sometimes struggle with cash flow, and there are a few different reports that can help,
- A/R Aging Report: This report will show you how much money you are owed by your customers.
- Cash Flow Statement: This report will show you where your money is coming in and going out.
- Profit & Loss Statement: This report will show you how much profit or loss your business has made over a period of time.
- Accounts Payable Aging Report: This report will show you how much money you owe to your vendors.
By analyzing these reports, you will be able to make informed decisions about where to cut costs and how to improve your cash flow.
Prepare a Quarterly Budget
Another one of our accounting and bookkeeping tips for small business owners is to prepare a quarterly budget. This will help you track your expenses and ensure you are not overspending.
Use Accounting Software
There are many accounting software programs available that can make accounting and bookkeeping easier for small business owners. Some popular accounting software programs include QuickBooks, Xero, and FreshBooks.
Hire Professionals to Handle Your Accounting and Bookkeeping
Last but not least, one of the best accounting and bookkeeping tips for small business owners is to work with a professional accounting team. A professional accounting team can handle all your accounting and bookkeeping needs so that you can focus on running your business.
Let Quantum Help Handle Your Accounting and Bookkeeping Needs
As a small business owner, staying on top of your accounting and bookkeeping is important. By following the tips above, you can ensure that your accounting is in order and that you are not overspending. Our team at Quantum Accounting can help you with all of your accounting and bookkeeping needs. Contact us today to learn more about our services!
